13 January 2017
For example You sold some goods to a customer on 1 Jan xx and agreed that payment should be made in USD and the value is $1,000. At the date of sales the exchange rate was 40 Rs/ 1usd. You booked Rs.40,000 as your receivables. On 31st Jan xx (assume date on management account is provided) the rate changed to 30 Rs/1Dollar. So the value of debtors is now only Rs.30,000. You have to recognize a foreign exchange loss of Rs.10,000 (40,000 minus 30,000) in your management reports to account for that loss.
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